Daily, technological advancements and social networks remind me of how small and connected the world has become. We’re all just a phone call, email or Skype chat away. Long before this global lifestyle became the norm, Marshall McLuhan coined the term ‘global village’ to describe how our world would be increasingly “shrunk” by modern advances in communication. Revolutionary at the time, McLuhan used an insightful analogy, likening the vast network of communication systems to one extended central nervous system. Today, events in one part of the world can be communicated to other parts in real-time.
Our lifestyles have changed accordingly. We’re truly global citizens: doing business, traveling, visiting family or friends, or planning our futures, aren’t simply limited to one country. In my day-to-day conversations, I often speak to the ‘swallows’ among us, those who chase the sun, living in South Africa for 6 months of the year, then abroad for the other 6 months. From these examples, it’s clear that wealth management also needs to innovate to keep up with the rapid pace of globalization. Carrick offers our clients creative alternative solutions, allowing them to live their lives unrestrained by geographical boundaries.
As wealth managers, diversification is a strategy we strongly reinforce when it comes to our clients’ investments. Have you ever considered diversifying your citizenship? As South Africans, our passports offer us limited travel options, meaning that acquiring a second citizenship can be a sensible proposition for many individuals and families. I have seen a rise in the popularity of dual citizenship, with a growing demand for international citizenship options for individuals wanting to firm up their future planning objectives, whether it be from a lifestyle point of view or as a rand hedge to protect against economic uncertainty.
In the light of South Africa’s unstable and uncertain political and economic situation, such as our credit rating downgrades and recession status, acquiring a second citizenship and alternative residence can increase your personal security and help you achieve a better quality of life. If you’re looking for an extra safeguard and exploring the available options for diversifying your personal interests and investment assets beyond our country’s borders, there are some important considerations to bear in mind.
Avoiding incorrect motivating factors for obtaining dual citizenship
It’s important that you make the decision for the right reasons, and that it forms part of a broader wealth management strategy. The acquisition of alternative citizenship should not be obtained for perceived tax reasons, as obtaining a second passport does not necessarily change your tax situation. Nonetheless, there are some situations where it might fit in with your business and family needs – in these cases, dual citizenship planning could become an element of your legitimate tax and estate planning. In every instance, you should consult with a specialized tax advisor regarding your individual circumstances, as it is vital that your citizenship planning is tailored to your own, unique business and personal requirements and goals.
The reasons for obtaining dual citizenship might be misconstrued as synonymous with emigration, when it couldn’t be further from the truth. While several of our country’s high net worth individuals are migrating part of their assets offshore, this does not necessarily mean they are emigrating, but rather that they are using global options available to them to protect their assets.
Main benefits of dual citizenship
Ensuring personal safety. Citizenship and a second passport could aid you in times of political unrest, civil war or similar situations. This is also one of the main reasons why many individuals consider an alternative passport as the best life insurance money can buy.
Reducing visa restrictions. If you travel internationally for business, you’ll know the practical difficulties that often accompany business trips. The logistical side of it often involves completing lengthy and time-consuming paperwork; travelling to a consulate or embassy for an interview; pricey visas; and/or being subjected to waiting for unknown periods of time for your passport to be sent back from the consulate or embassy. If you have dual citizenship, your second passport can make traveling between South Africa and other foreign countries easier.
Property ownership. Another main benefit of dual citizenship is the ability to own property in another country. Some countries restrict land ownership to citizens only, and as a legal citizen of two countries, you can purchase property in either or both countries. If you travel frequently between the two countries, this can also offer you’re a more economical way to live in two places.
Making the world’s markets work for you
Obtaining dual citizenship is a sensible strategy with which to reposition and protect your assets. At Carrick, we partner with the leading global firm in global residence and citizenship planning for private individuals and families seeking international mobility, investment diversification and personal security.
Through this partnership, we can help make sure that you are expertly guided through the process of acquiring what is widely considered one of the most valuable assets in the world today – a second passport.
CEO: Carrick Wealth
Published on BizNews.